N.Y. ESCOs Seek Investigation Into Default Service Reconciliation Process, Monthly Supply Rates

The Small Customer Marketer Coalition has petitioned the New York PSC for an investigation and examination of (i) the Annual Reconciliation of Gas Expenses and Gas Cost Recoveries codified at Title 16 NYCRR Section 720.6.5 to assess its impact and efficacy in the current regulatory and economic environment, and (ii) alternative cost recovery mechanisms that would ensure that the monthly gas adjustment clauses are truly reflective of current market costs.

SCMC cited significant reconciliation factors in natural gas utility supply rates -- such as 10.28 cents per therm at Consolidated Edison -- as prompting the need for an examination

"Inclusion of such significant out of period adjustments and reconciliations makes it virtually impossible to convey accurate market price signals to consumers. Further, it also serves to preclude customers from being presented with an 'apples to apples' price comparison. The reconciliation mechanism is itself reflective of additional internal reconciliations and adjustments which further heighten the opaque nature and untimeliness of this cost recovery mechanism. For instance, with the growth of retail access programs the impacts of reconciling and crediting prior year cash outs and other retail choice related cost components have had a distortive impact," SCMC said

SCMC also noted that these out-of-period adjustments, "also create inter-generational inequities between customers who remain with the utility and those who opt for retail access."

SCMC said that the lack of transparent pricing to customers hinders ESCOS' ability to offer value-added products and services, which the Commission has encouraged in its recent retail market investigation orders and the reforming the energy vision proceeding.

"Furthermore all utilities are now implementing a web based Price Calculator. This tool will allow retail access customers who received a consolidated utility bill from Con Edison to receive a historical 12 month comparison of their ESCO bill compared to what they would have paid for the same period as a full service utility customer. In this new environment it is imperative that utility pricing be reflective of actual market costs, otherwise the comparison will send inaccurate market signals and inclusion of a credit or surcharge would inequitably place the ESCO in an inaccurate pricing position. Clearly, the consumer cannot make a rational 'apples to apples' comparison, based on a calculator that does not reflect market costs," SCMC said